Middle East Bonds

Luxembourg’s decision to issue its debut sukuk in euros seems to defy common sense, since it will be selling into a Gulf-dominated market where most investors are fixated on dollars. But the grand duchy is right to stick with the currency and sukuk market participants should welcome this unusual choice.

The Central Bank of Bahrain has sold BD20m ($53m) of short-term sukuk al ijara with lower orders than last month’s issue.

Kuwait Energy has mandated Bank of America Merrill Lynch as the sole bookrunner for a Reg S dollar bond. The roadshow for the deal will start on July 15.

A dispute between shareholders of the Algerian subsidiary of Bahrain’s Al Salam has seen Algeria’s central bank commission place the bank under temporary administration.

Corporate and debutant issuers have driven Saudi sukuk to its busiest six months on record according to IFIS figures.

It is a fine testament to the growing stature of Islamic finance that various novel borrowers are pressing ahead to issue international sukuk for the first time — the likes of Hong Kong, Luxembourg and Dogus Group among them. But with so many debuts revving up to join an autumnal convoy, those that can beat the traffic are advised to do so.

European banks are so anxious to comply with US sanctions law that in some cases, they are interpreting the rules more strictly than US banks, and even occasionally losing business by it, several bankers said this week. Jon Hay and Michael Turner report.

Year to date CEEMEA sovereign bond volumes are at their highest level ever, with the total sold so far already soaring past some analysts’ full year predictions. Issuance is less than $20bn off the record set in 2012, and with Macedonia and Bahrain adding themselves to the list of CEE and African sovereign deals still expected, 2014 could easily become the new benchmark for sovereign supply, said analysts.

With the first half of the year completed, regular IFIS league table topper HSBC has taken a commanding lead in dollar sukuk for share of total issuance value, but Emirates NBD and JP Morgan have surged up the ranks for first ever top five placings, with ENBD on more dollar deals in the period than any other bank. Meanwhile, CIMB has opened a gap in global sukuk arranging after trailing Maybank at this time last year, but the competition looks set to heat up further in the second half.

The International Islamic Liquidity Management Corp is set to re-issue $860m of commercial paper style sukuk next week – its seventh issue to date under its short term sukuk programme.

The Kingdom of Bahrain has mandated three banks for an international bond, according to a banker away from the deal.

With the first half of the year completed, regular IFIS league table-topper HSBC has taken a commanding lead in dollar sukuk for share of total issuance value, but Emirates NBD and JP Morgan have surged up the ranks for first ever top five placings, with ENBD on more dollar deals in the period than any other bank. Meanwhile, CIMB has opened a gap in global sukuk arranging after trailing Maybank at this time last year, but the competition looks set to heat up further in the second half.